Fitch Ratings has affirmed its top rating of "AAA" and S&P Global Ratings has also assigned its top rating of "AA+" to the City of Midland, citing strong budgetary performance and flexibility in their findings at the end of last month.
Analysts said in the S&P Global Ratings report that the City of Midland's budgetary performance is "strong" and that City officials have made necessary adjustments to the budget to offset declining revenues. The S&P Global Ratings report attributes the high rating to "Midland's very strong reserves and management's ability to historically operate within a balanced budget," stating also that "Midland's economy will continue to demonstrate stability despite its exposure to the oil and gas sector."
The City's finance department monitors and reports on the budget on a monthly basis to ensure compliance and take corrective actions to ensure a balanced budget, if needed. Finance officials with the City also forecast revenues and expenditures by analyzing historical trends and revenue growth projections.
Fitch Ratings noted that the City's unrestricted fund balance for fiscal year 2015 is currently at $71 million, or 64 percent of expenditures, to provide cushion in the case of further economic decline. "The city historically has maintained robust reserve levels, and has continued to do so during both the 2007-2009
recession (which was relatively mild in the region) and the current energy sector downturn," according to the report. "The city is expected to manage through periods of economic weakness while preserving a superior level of fundamental financial flexibility."
By obtaining the highest issuer credit rating, the City of Midland is able to receive the lowest interest rate possible when selling bonds for capital projects, such as the upcoming construction of the Midland Center.###
Media Contact: Public Information Officer Sara Bustilloz